The US economy is forecast to have posted another solid month of job gains in what has become an “extremely tight” labour market, according to Federal Reserve chair Jay Powell.

Employers in the world’s largest economy are estimated to have added 415,000 jobs in February, according to a consensus forecast compiled by Bloomberg. That will build on 467,000 positions created in January, and is expected to push the unemployment rate down to 3.9 per cent.

The data, which will be released by the Bureau of Labor Statistics at 8.30am Eastern Time on Friday, is also set to show another sizeable jump in monthly wage growth.

Average hourly earnings are expected to have ticked up another 0.5 per cent in February, a slight moderation from January’s 0.7 per cent monthly increase. Hourly earnings are forecast to be up 5.8 per cent over the past year.

Wages have soared higher this year, especially for lower-income workers, as labour shortages across a broad swath of sectors workers have prompted businesses to offer better pay to fill a near-record number of vacant positions. US businesses reported 10.9mn unfulfilled positions at the end of last year.

The number of job openings has soared compared with historical standards as the US workforce experiences near record turnover, with the number of Americans voluntarily quitting the workforce historically elevated.

Commodity prices have moved up significantly, energy prices in particular. That’s going to work its way through our US economy.

While US President Joe Biden cheered the 6.5mn jobs created by the US at his State of the Union address this week, the number of Americans employed or looking for a job remains roughly 1 per cent below pre-pandemic levels. Friday’s report is expected to show the labour force participation rate plateaued in February at 62.2 per cent.

The heftier compensation and improved benefits offered by US businesses to lure back workers has coalesced in what Powell said on Thursday was a “great labour market for workers, especially workers at the lower quartile of earnings who are getting the biggest wage increases”.

In testimony to US lawmakers This week, Powell said labour market strength alongside very elevated inflation justifies the US central bank proceeding with its plans to raise interest rates this month, despite the prospects of slower growth stemming from Russia’s invasion of Ukraine.

Powell said it is too early to know the exact economic ramifications of the conflict, but suggested inflation, which is now running at the fastest pace in four decadescould push even higher given the recent run-up in oil prices to multiyear highs.

“Commodity prices have moved up significantly, energy prices in particular. That’s going to work its way through our US economy,” he told members of the Senate banking committee. “We’re going to see upward pressure on inflation, at least for awhile . We don’t know how long that will be sustained for.”

Powell said he supports a quarter-point interest rate increase as the first step in a “series” of adjustments this year, with the Fed potentially considering raising rates by larger increments at one or more meetings if price pressures stay elevated.